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As the government announces 2015/16 council tax hikes of £16 (1.1%) on average, over two million consumers admit that they already have to pay this bill on their credit card.

With many councils stinging consumers with an average surcharge of 2% for credit card payments, this could add an additional £30 to the average annual council tax bill increasing it from £1,484 to £1,514.

Together these consumers could be hit with a total annual surcharge bill of £60 million in the next year on top of the price hikes. This surcharge is a postcode lottery, with some councils charging up to 2.6%.

On top of this 2% self-inflicted surcharge hike, households that fail to pay off their credit card bills in full every month will incur further interest charges.

Those making the minimum repayment on their credit card would take 21 years and 5 months to repay the average annual council tax bill of £1,484, incurring £3,381 of interest during that period.

As many consumers brace themselves for the 1st April council tax price hikes announced today, new research¹ from money.co.uk, the price comparison website, reveals that 7% of consumers are already using credit cards to pay this bill.

Not only will these people pay an average increase of £16 per year for their council tax over the next 12 months, based on the average band D council tax bill of £1,484, they will also incur an additional 2%² surcharge for paying with their credit card.

This will increase the bill by an additional £30 a year which is almost double the average annual price increase.

The fee charged for paying by credit card is a postcode lottery with some councils not levying any charge at all whilst others charge up to 2.6%. With over two million consumers currently paying their bill in this way, credit card surcharges could add up to £60³ million to council tax payments in the next 12 months alone.

This doesn't take into account the additional credit card interest charges which are on average 17.8% APR⁴. Those who do not pay their bill off in full every month and are not on a 0% purchase deal could also face this additional cost.

For people making minimum repayments on their credit card, the average council tax bill of £1,484 will take 21 years and 5 months to repay, incurring £3,381⁵ of interest over that period.

Hannah Maundrell, Editor in Chief of money.co.uk, comments:

"Paying household bills with a credit card is never ideal, but for many it seems to be the norm. Whilst it is generally better to settle a bill by card rather than miss the payment altogether, it will often mean you pay a lot more.

"This is especially the case if you don't clear your balance in full when you get your statement, and can become a big problem if you only make minimum repayments. With council tax price increases already forcing many consumers to pay out more, adding credit card interest and surcharges on top of this could more than treble their total bill.

"If you're struggling to keep on top of households bills, it's always best to contact the provider and explain your situation before you miss any payments so that you can reach an agreement around manageable repayments."

Notes to editors: 1. Research was carried on behalf of money.co.uk by OnePoll in December 2014 with a total sample of 2,000 UK adults with a credit card.

2. Mode-average credit card surcharge based on data collected from 60 councils.

3. Research was carried on behalf of money.co.uk by OnePoll in December 2014 with a total sample of 2,000 UK adults with a credit card. There are 30 million credit card holders in the UK (UK Card Payments Report 2014).6.75% of 30m = 2,025,0002% (the mode-average credit card surcharge) of £1,484 (the average Council Tax bill) = £29.68£29.68 x 2,025,000 = £60,102,000.

4. Average credit card interest rate - BOE.

5. Based on average credit card interest rate of 17.8% APR being repaid monthly at a minimum of 1% (plus interest) of the credit card balance.

press@money.co.uk